British American Tobacco - Dividend Reinvestment Plan

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Dividend Reinvestment Plan

Build up your shareholding

The British American Tobacco Dividend Reinvestment Plan (the 'DRIP') has been introduced as a straightforward and economic way of using your dividends to build up your shareholding in British American Tobacco.

The British American Tobacco Dividend Reinvestment Plan is not being offered in the US or to US persons or in Canada or otherwise to North American persons, nor is it being offered in any jurisdiction where participation in the DRIP would require Computershare Investor Services PLC or British American Tobacco to comply with governmental or regulatory procedures or similar formalities.

Basic principles

The basic principles of the DRIP are:

cash dividends are used to buy ordinary shares in British American Tobacco p.l.c. ( 'Share' or ‘Shares’) by way of a special dealing arrangement;

any cash dividend that is not sufficient to buy a Share is retained within the DRIP (without interest) and added to the next dividend payable to you;

to cover the costs of buying the Shares on your behalf and continuing the administration of the DRIP, you will be charged 0.5% of the amount actually used to buy the Shares for you;

you will also be charged 0.5% of the value of the Shares purchased to cover the stamp duty reserve tax payable; and

shares purchased under the DRIP will be credited to you by the tenth working day after the respective dividend payment date.

Your participation in the DRIP is entirely voluntary, and you may withdraw from the scheme at any time upon giving the required notice in writing to Computershare Investor Services PLC.

DRIP literature and participation

If you wish to participate in the DRIP, please contact the Plan Administrator at Computershare Investor Services PLC for an application form. Alternatively, you can download both the DRIP booklet and the application form by visiting www.investorcentre.co.uk/viewbatshareholding and selecting Downloadable Forms.

In both cases, you will need your shareholder reference or account number to hand, which can be found on your share certificate or dividend counterfoil. Computershare Investor Services PLC will also be able to advise you of the date by which your completed instructions must be received, in order to be registered in time for the next applicable dividend payment.

Taxation

Income tax

You will be liable to tax on dividends invested in the DRIP as if you had received your dividend in cash. For details of the dividend payment amounts see Dividend history. As a general indication, if you are resident in the UK and pay tax at a lower or basic rate – you have no further tax to pay as the 10 per cent tax credit will meet the income tax liability.

Capital gains tax

For capital gains tax purposes, the base cost of the Shares bought on your behalf under the DRIP, for calculating the chargeable gain or allowable loss arising on the sale, will be the price of the Shares purchased including the stamp duty reserve tax and the costs of acquiring the Shares.

Please refer to the DRIP booklet for a general summary of the tax issues for individual shareholders who are resident in the UK. The summary is for guidance only and if you are in any doubt, you should consult an independent financial adviser authorised under the Financial Services and Markets Act 2000.